Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 21 - No. 22)
What is the impact on the partners' capital accounts when the partnership earns a net profit?
The capital accounts are decreased.
The capital accounts remain unchanged.
The capital accounts are increased.
Only the partner's drawings account is affected.
Explanation
Profits increase the partners' capital accounts, based on their profit-sharing ratio.
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